“We can’t sign an annual contract”. That was the bad news from our newly acquired client. We fought hard and beat out 8 other agencies to win this business from a highly sought after top tier brand. Unfortunately, things started to go awry before we even got started because they wouldn’t agree to our standard terms. We faced the difficult choice of either walking away or doing something we haven’t done.
For this program we needed to hire talent to meet demand and having an annual contract was critical to attracting great talent. Most everyone understands and accepts the risk of an annual client contract but anything less makes it difficult to recruit the right talent. We explained this to our client many different ways and he kept saying the same thing, “I understand and we’ll have to take that risk because I can’t sign an annual contract.”
We were relentless in trying to persuade him to sign an annual contract and the only thing we accomplished was making him more and more frustrated. It wasn’t till we asked him why he can’t sign an annual contract that things started to change. What we discovered is that for new initiatives, his company did quarterly fiscal planning. This means they can only fund a new initiative a quarter at a time and after a year, the new initiative could shift to annual fiscal planning. As such, they could not sign any contracts that financially committed them beyond a quarter at a time. Amazing what you learn when you are actually listening and asking questions instead of being stuck in persuasion mode!
At this point, we realized that we had a packaging issue. He actually had no philosophical issue with an annual agreement he just didn’t have the authority to do it at that point. However, if we could repackage the proposal so that he got what he needed and we got what we needed, we’d be in good shape. This didn’t mean we needed to add or remove value, we just needed to move the variables around so he could sell it internally and we could sell it to potential talent.
Our solution became obvious once we got out of our own way. We repackaged the proposal so that we gave him a quarterly agreement that he could sell internally. In return, we needed to have the contract renew automatically every quarter (unless he notified us 90-days prior to the start of a quarter that it wouldn’t renew; this gave him the out he needed) then at the year mark, the contract would convert to an auto-renewing annual contract.
This new solution gave us the ability to recruit new talent because we could legitimately tell new talent that we had an auto renewing contract that would only be cancelled if we didn’t do our job. But if something were to happen beyond our control, they would be given at least a 90-day notice. Something everyone was comfortable with.
For our client, we gave him something that he had the authority to sign and the ability to sell internally. After a couple of minor tweaks, the deal was signed and we were on our way to what would become a very fruitful relationship.
The things I remember the most about that experience are:
- Listen. We spent too much time trying to persuade our POV versus listening to the real need.
- Be curious. We weren’t curious enough on why he couldn't sign an annual agreement. We made bad assumptions, wasted time, and created a lot of frustration.
- Get creative. Once we knew the need and understood the drivers behind them, we just got creative on how to repackage the proposal to meet everyone’s needs.
Remember, repackaging is not about giving or taking more value, it’s about reconfiguring the variables in a way that makes the proposal more acceptable for everyone involved.
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